Enjoying A Dry Warm Summer Here in Colorado
August 25, 2008
Environmentally Friendly Remodeling and Updated
A Trend Here to Stay
The green movement is in front of us daily but as energy prices rise and real estate values remain unstable across the nation, energy efficiency and green products will remain a hot topic. Being aware of green trends, is especially important in real estate, where green products and building concepts are increasing home values and desirability along with helping owners increase their homes efficiency. According to McGraw Hill Construction, as much as 20% of new construction will be green by 2012. A recent study of real-estate listings in Seattle found that certified green homes sold for an 11% premium per square foot and sat on the market for a quarter less time.
The Ins and Outs of Green
Gwendolyn Bounds, with the Wall Street Journal, lists several tips for going green. 1) Recycle your old cabinets, flooring and appliances by donating or selling them to programs like Habitat for Humanity or sell them on craigslist instead of throwing them away. 2) Use local contractors or green trades’ people. 3) Use water- based paints and finishes in your home. 4) Insulate with cellulose, formaldehyde-free fiberglass with recycled contents or VOC- free urethane foams or recycle denim. 5) Conserve by using floors + countertops made from recycled and sustainable products: scrap metal, glass, bamboo, concrete, wood and paper.
Further Ideas
Flooring- Wood products for floors are in demand but designers are turning towards harvested woods that quickly regenerate themselves like Lyptus and bamboo, so they’re less expensive than oak hardwoods. Other ideas are cork, linoleum, recycled rubber…the options are endless.
Paint- Use paint with little or no VOC’s. VOC’s are solvents that disperse into the air as paint dries, VOC’s can contribute to smog, the smelly odor of paint, as well as kidney, liver damage and respiratory and memory problems.
Countertops- Most consumers want their counters to be stain and scratch resistant and durable. Natural stone, such as granite can satisfy those criterias but tend to consume a lot of energy in transportation. There are now recycled paper-based countertops, concrete, engineered stone, made of particles from granite and quartz or enviroglass.
Windows- Adding more energy efficient windows to a home can drastically reduce energy costs. For more natural light add sky lights or solo tubes. You can also coat your windows with Solarban 60 coating to keep more heat in the home in the winter and reduce sun-generated heat in the summer.
Insulation- Instead of the old fiberglass batt sheeting look into a blow-in-blanket system or spray foams. Fiberglass is a know carcinogen and leaves gaps around pipes and fixtures unlike the new foam made from cellular plastic. The new products provide superior energy efficiency and improved indoor air quality. For more information visit www.nahbgreen.org , www.energystar.gov , www.ubma.org , capital distributing.com or buildinggreen.com.
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“Real” Real Estate News
August 25, 2008
Sifting Through The Real Estate Headlines
Denver’s Shifting Market
Despite what our media portrays, Denver’s Real Estate market is improving and has faired much better than most major metropolitan cities. Colorado remains one of the top 10 real estate markets in the nation yet we are also in the top 10 for foreclosures. One of the reasons is the high amount of sub prime financing that was obtained during the last 5 years. The 100% financing can work if you have a market that is substantially increasing but much of our market has remained flat overall for a few years leading to a crisis when these loans adjusted. Denver usually runs counter to the rest of the nation and we are seeing great signs that our market is improving and will see another great run. Our inventory of active homes appears to be decreasing on average and is rapidly decreasing in several sub-areas of the Denver metro region. When we see our active home inventory shrinking it usually indicates a move towards a more balanced market and a shift towards a sellers market. Our month’s supply of inventory is currently 7 months across the Denver Metro Area and that is nudging closer to our equilibrium of 6 months. Overall our market is correcting itself and as interest rates remain low our buyer interest should increase. Our home sales to date are up 5% from last years February and January sales.
Foreclosure Data
Colorado has moved from 1st in foreclosures nationwide in 2007 to 5th place as of this January. Colorado recently received 1.5 million dollars in the form of a federal grant for foreclosure prevention. We have also seen foreclosure law changes allowing homeowners a longer period of time to remain in their home, come current or sell their home to avoid foreclosure. There was a recent study done by the Federal Reserve that shed some light on Denver’s foreclosures. According to the report, Denver area sub prime loan originations peaked earlier than the nation in 2005, and very few sub prime loans were originated in 2007. More than 60% of the Denver Area sub prime loans are current. A decline in short-term interest rates in January and February should help those borrowers avoid painful rate readjustments. There are still a large number of foreclosures and good deals out there but the public perception is that these homes are trading at 80% of asking or lower, whereas most are trading between 90-95% of original list price. Don’t forget our interest rates are still the lowest we have seen in years and last time we had a influx of foreclosures in the 1980’s we had major job losses, no major movement to our state and interest rates above 10%.
Growth Areas and Outlook
There still continues to be an urban movement in the older more developed parts of the city with gentrification occurring from Montclair to The Highlands on down to Platt Park. Commercially, the acquisition of Denver-area real estate properties is expected to remain healthy and CB Richard Ellis Inc. predicts rent increases will continue to push building values up. Rental vacancies in residential and commercial remain low with rental rates increasing. As a rule of thumb when commercial industry is booming and building, our residential market tends to follow shortly!
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